StraitNZ talking to staff about cuts

The owner of a private freight and passenger ferry service across Cook Strait is consulting employees as it copes with a major drop in demand due to Covid-19.

Employees of StraitNZ, which runs ferries between Wellington and Picton, are understood to have been summoned for meetings, with the company confirming it needed to adjust to a sharp drop in demand.

“We are consulting with our people to determine how we best respond and reorganise, to reflect the approximate 50 per cent drop in freight volumes and overnight decline in passenger numbers to zero,” StraitNZ chief executive Louise Struthers said.

StraitNZ competes with KiwiRail’s Interislander service under the Bluebridge brand. It has two vessels, the Straitsman and the Strait Feronia, although the latter is currently undergoing repairs.

In late 2015 it said it was carrying 300,000 passengers, 100,000 cars and 35,000 trucks each year.

In 2016 the business was sold to Australian private equity group Champ. Although at the time the parties declined to say how much the business sold for, a summary of transactions released by the Overseas Investment Office in 2017 said Champ paid in excess of $100 million for a group of assets.

Struthers would not discuss the nature of the staff consultations, or whether the company had approached the Government for help.

But she described the business as “critical infrastructure”.

In its most recent financial accounts, StraitNZ Holdings Ltd reported net profit of $3.9m on revenue of $172.3m for the year to March 31, 2019.

Talks at some level are believed to have taken place between the company and Treasury, which is managing requests for help from large companies.

Finance Minister Grant Robertson said the Government would not comment on which “economically significant” companies it may or may not be engaging with at this time.

Robertson added: “We have been clear that companies across the board should engage with their shareholders and their banks as their first ports of call to work on a plan for responding to the effects of Covid-19.”

KiwiRail chief executive Greg Miller said the Interislander had “taken steps to match capacity to demand” including putting one of its three ferries on standby.

“KiwiRail staff are being encouraged to take leave, and all discretionary spending is being . . . reduced.”